The Indian headline index NIFTY ($NIFTY) moved past its double top resistance level of 12103 on a closing basis, ending at a fresh life-time high at 12221.25. However, looking at the broader NIFTY500 Index ($CNX500) throws up some interesting insights.
The above chart tells a story of a thousand words. The first time when the markets peaked in early 2018, it was a secular rise. This was reflected in the RS Line (the NIFTY 500 index compared against the NIFTY50 index) which was seen secularly rising.
However, since around early 2018, the broader markets have revisited peak levels 4 times again and, each time it did so, was supported by fewer and fewer stocks. This, again, is reflected in the RS Line, which has been steadily declining and is presently at its new low. This, in general, points towards the fact that the the broader markets in India are increasingly underperforming the frontline index on a continuing basis at present.
About the author:Milan Vaishnav, CMT, MSTA is a qualified Independent Technical Research Analyst at his Research Firm, Gemstone Equity Research & Advisory Services in Vadodara, India. As a Consulting Technical Research Analyst and with his experience in the Indian Capital Markets of over 15 years, he has been delivering premium India-focused Independent Technical Research to the Clients. He presently contributes on a daily basis to ET Markets and The Economic Times of India. He also authors one of the India's most accurate "Daily / Weekly Market Outlook" -- A Daily / Weekly Newsletter, currently in its 15th year of publication.
Milan's primary responsibilities include consulting in Portfolio/Funds Management and Advisory Services. His work also involves advising these Clients with dynamic Investment and Trading Strategies across multiple asset-classes while keeping their activities aligned with the given mandate.